Reported PPI Raised Estimate for Core PCE Ex Housing Inflation to 4.7%, up from 4.6% in March
The majority of the Personal Consumption Expenditures (PCE) inflation is derived from the Consumer Price Index (CPI) data and the Producer Price Index (PPI). Additional components come from the Import Price Index (IPI) and…
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Summary of Bank Failures
Review of Silicon Valley Bank, Signature Bank and First Republic Bank by the Fed revealed management relied too heavily on uninsured deposits and invested too much in long-term bonds that declined in value as interest rates climbed.1
Relaxed rules and regulatory easing allowed for these banks to…
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Balance sheet cash flow equals the operating cash flow less financial cash flow, determined by changes in the balance sheet. If one is more negative than the other, or both are negative, then balance sheet cash flow is negative.
Rise in the Number of Banks with Negative BSCF Demonstrates Risk
The…
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Since November, the Fed has been talking about inflation as the story of three categories: goods, housing, and non-housing services (NHS). The latter category, core NHS, comprises around half of core PCE expenditures.1
Comments from Jerome Powell, Fed Chairman
“Finally, we come to core services other than housing. This spending category covers…
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Brokered CDs Reaching New Highs in 2024
Deposit costs at banks reflect competition from yields on the 3-month T-Bill near 5%, and the 2-year at 4%, coupled with the upward pressure of another potential 25-basis point hike in the Fed funds rate in May. Together, these yields forecast rising deposit costs…
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